Computing and Information Systems - Theses
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ItemOpportunity and Threat: Board Perspectives on the Secondary Use of Data( 2022)The business analytics and strategic management literatures provide many examples of organisations using data as a key mechanism for competitive advantage (Davenport and Harris 2007; De Caigny et al. 2020; Kitchens et al. 2018; Piccoli and Watson 2008; Pierce et al. 2015; Slof et al. 2021; Tallon et al. 2015; Tamaddoni et al. 2016; Yan et al. 2015). However, the ‘rules of engagement’ are evolving, the regulatory landscape is becoming increasingly complex, and examples of poor outcomes are increasingly common (Benaroch and Chernobai 2017; boyd and Crawford 2012; Boyd 2021; Citron 2008; Clarke 2016; Crawford and Schultz 2014) . Anecdotal practitioner evidence indicates that organisations having long data histories and therefore the potential to compete through data are reluctant to do so, whilst emerging companies with a relatively smaller existing asset base often seek to ‘win with data’ . Underlying this apparent contradiction is the tension between the opportunities and the threats involved in exploiting the secondary use of data. The board of directors – in its role of setting and monitoring risk appetite – needs to be able to govern this risk / reward tradeoff (Australian Institute of Corporate Directors 2019a; International Organization for Standardisation 2018). Unfortunately, contemporary data governance approaches are inadequate: they are overly rigid and risk oriented, and they do not provide a platform for the board to manage this critical area (Liu et al. 2019). How then does an organisation determine whether to proceed with initiatives associated with the secondary use of data within their organisation? Implicit in the motivation for this research program was the idea that organisations that chose to treat data as a strategic enabler would have a common set of characteristics, and those that chose not to treat data as a strategic enabler would also have a common, but different, set of characteristics. Furthermore, these characteristics would be seen at the board level, as board support (or lack thereof) would influence how an organisation pursues data as a source of advantage. Accordingly, configurational theory is used to identify these sets of characteristics (Fiss 2011). As a first step, an initial set of potential factors is identified through a synthesis of practitioner experience and relevant literature. The resulting research model is then refined through analysing the data generated through focus groups of relevant experts - partners of professional services firms that advise boards in data and analytics. This refined research model is used to frame conversations with more than forty informants that are board directors of Australia commercial entities. The data from these board directors is analysed through a Gioia approach (Gioia et al. 2013) to identify a set of factors that influence how an organisation pursues the secondary use of data as a source of competitive advantage. A fs-QCA analysis is then used to identify sets of configurations (causal combinations of factors) that result in an organisation pursuing one of two outcomes: “Data as a Critical Enabler”, or “Data as a Minimal Source of Advantage”. The resulting four configurations have empirically sound support with sufficiently high parameters of fit (Schneider and Wagemann 2013). Within these configurations, three factors (Exploration Mindset, Active Board, and Future Focussed Strategy) are clearly important as they were involved as core factors and their presence or absence led to “Data Critical Enabler” configurations and “Data Minimal Source of Advantage” configurations, respectively. The three other factors are of varying importance. The presence of Discomfort with Traditional Sources of Advantage was a core (significantly important) factor for “Data Critical Enabler” configurations, whereas the absence was only a peripheral (supportive, but not as important as a core factor) factor for “Data Minimal Source of Advantage” configurations. Two other factors (Individual Experience with Data and Proximate to Key Data) were peripheral factors in the “Data Critical Enabler” configurations and had no role in the “Data Minimal Source of Advantage” configurations. This would seem to indicate that mindset factors (Exploration Mindset, Active Board, Discomfort with Traditional Sources of Advantage, Future Focussed Strategy) are more important than either background (Individual Experience with Data) or situational (Proximate to Key Data) factors. The dominance of the mindset factors seems to indicate that the primary influence of how a board views the secondary data as a potential source of strategic advantage relates to the mindset of the individuals, in particular their sense of their activist role in positioning an organisation for sustained success as well as their willingness to explore what might be possible. As described above, the findings suggest that the perspectives of the board have a significant impact on the utilisation of data as a critical enabler of strategy. The results of this thesis suggest that the data governance literature expands its consideration of stakeholders to explicitly consider the role of the board. Whilst this work is focussed on the data governance field, this work has implications on two other theoretical domains relevant to information systems (IS) research. First, in the domain of ambidexterity (O’Reilly & Tushman, 2008) / dynamic capabilities (Fainshmidt et al., 2019), the findings indicate that organisational motivation at the most senior levels of an organisation is a necessary pre-condition for organisations succeeding with an ambidexterity approach. Second, in the domain of resource-based theory (RBT) of the firm / knowledge-based theory of the firm, our findings confirm that whilst data can be a VRIN (Valuable, Rare, Inimitable and Non-Substitutable) asset, these assets can be latent assets. Generating value from such asset requires a conscious decision, and perhaps RBT researchers could explore the conditions by which an asset transitions from ‘potentially valuable but latent’ to ‘active’. This thesis concludes by noting four contributions important to researchers and practitioners. First, it confirms the phenomena that board perspectives do influence an organisation’s approach to the secondary use of data. Second, using a grounded theory approach in an area of limited extant literature, this study presents empirical evidence in the form of configurations of factors that lead to organisations considering or neglecting the secondary use of data as a critical enabler of strategy. Third, it demonstrates a novel use of proven analytical techniques. Finally, it provides researchers and practitioners a set of instruments to further explore and influence this important area.